Halliburton back in the black

US government work in Iraq has restored Vice President Dick Cheney's old firm Halliburton to profit in the first quarter. The company out stripped even the most optimistic Wall Street forecasts to chalk up a net profit of $365m (£191m).

This is a dramatic turnaround from the loss of $65m this time last year after the company paid hefty asbestos settlements.

One of the group's star performers was the KBR engineering and construction unit, which has in the past dragged earnings lower.

While being the subject of great controversy over how it was awarded Iraq reconstruction contracts and how it has subsequently handled its business there, the unit turned in an operating profit despite the completion of a key Iraq oil contract - the first work to be awarded after the US-led invasion.

KBR is the biggest contractor to the US military in Iraq, handling most support service from mail delivery to providing food for troops.

Nearly a third of Halliburton's revenue - about $1.5bn - now comes from Iraq-related work, where it has increased margins from less than 1% to almost 3%.

Earlier this month, the company said it struck a deal with the US Army to resolve a 14-month billing dispute over meals provided to troops in Iraq.